Text: HSB00188 Text: HSB00190 Text: HSB00100 - HSB00199 Text: HSB Index Bills and Amendments: General Index Bill History: General Index
PAG LIN 1 1 Section 1. NEW SECTION. 15E.193D OTHER ELIGIBLE 1 2 BUSINESSES. 1 3 1. A business which is not located in an enterprise zone 1 4 is eligible to receive incentives and assistance only as 1 5 provided in this section. Sections 15E.193 and 15E.196 do not 1 6 apply to a business qualifying under this section. A business 1 7 is eligible under this section if the business meets all of 1 8 the following criteria: 1 9 a. Is not a retail business or a business where entrance 1 10 is limited by a cover charge or membership requirement. 1 11 b. Provides all full-time employees with the option of 1 12 choosing one of the following: 1 13 (1) The business pays eighty percent of both of the 1 14 following: 1 15 (a) The cost of a standard medical insurance plan. 1 16 (b) The cost of a standard dental insurance plan or an 1 17 equivalent plan. 1 18 (2) The business provides the employee with a plan that is 1 19 monetarily equivalent to the plan provided for in subparagraph 1 20 (1). 1 21 c. Pays an average wage that is at or greater than the 1 22 lesser of the average county wage or average regional wage, as 1 23 determined by the department. 1 24 d. Creates at least twenty-five full-time positions and 1 25 maintains them for at least ten years. 1 26 e. Makes a capital investment of at least two million 1 27 dollars. If the business will be occupying a vacant building 1 28 suitable for industrial use, the fair market value of the 1 29 building and land, not to exceed one million dollars, shall be 1 30 counted toward the capital investment requirement. 1 31 2. a. For purposes of receiving incentives and assistance 1 32 under this section, a business located outside all enterprise 1 33 zones in a city or county meeting the distress criteria 1 34 provided in section 15E.194 shall use the application process 1 35 provided in section 15E.195. If an enterprise zone commission 2 1 has not been established in the city or county, the city or 2 2 county shall establish a commission pursuant to section 2 3 15E.195. 2 4 b. After approval of a project by ordinance or resolution, 2 5 a city or county that does not meet the distress criteria 2 6 provided in section 15E.194 shall submit an application for 2 7 incentives and assistance to the department of economic 2 8 development. As part of the application, the city or county 2 9 shall submit information relating to the requirements listed 2 10 in subsection 1. The department may approve, defer, or deny 2 11 the application. 2 12 3. If a business has received incentives or assistance 2 13 under this section and fails to maintain the requirements of 2 14 subsection 1 to be an eligible business, the business is 2 15 subject to repayment of all or a portion of the incentives and 2 16 assistance that it has received. The department of revenue 2 17 and finance shall have the authority to recover the value of 2 18 state taxes or other incentives provided under this section. 2 19 The value of state incentives provided under this section 2 20 includes applicable interest and penalties. The department of 2 21 economic development and the city or county shall enter into 2 22 agreements with the business specifying the method for 2 23 determining the amount of incentives or assistance paid which 2 24 will be repaid in the event of failure to maintain the 2 25 requirements of subsection 1. In addition, a business that 2 26 fails to maintain the requirements of subsection 1 shall not 2 27 receive incentives or assistance for each year during which 2 28 the business is not in compliance. 2 29 4. In making its decision regarding an application, the 2 30 department of economic development shall consider the impact 2 31 of the eligible business on other businesses in competition 2 32 with it and compare the compensation package of businesses in 2 33 competition with the business being considered for incentives 2 34 or assistance. The department shall make a good-faith effort 2 35 to identify existing Iowa businesses within an industry in 3 1 competition with the business being considered for incentives 3 2 or assistance. The department shall also make a good-faith 3 3 effort to determine the probability that the proposed 3 4 incentives or assistance will displace employees of existing 3 5 businesses. In determining the impact on businesses in 3 6 competition with the business seeking incentives or 3 7 assistance, jobs created as a result of other jobs being 3 8 displaced elsewhere in the state shall not be considered 3 9 direct jobs created. 3 10 However, if the department finds that an eligible business 3 11 has a record of violations of the law, including but not 3 12 limited to environmental and worker safety statutes, rules, 3 13 and regulations, over a period of time that tends to show a 3 14 consistent pattern, the eligible business shall not qualify 3 15 for incentives or assistance under this section, unless the 3 16 department finds that the violations did not seriously affect 3 17 public health or safety or the environment, or if they did, 3 18 that there were mitigating circumstances. In making the 3 19 findings and determinations regarding violations, mitigating 3 20 circumstances, and whether an eligible business is eligible 3 21 for incentives or assistance under this section, the 3 22 department is exempt from chapter 17A. If requested by the 3 23 department, the business shall provide copies of materials 3 24 documenting the types of violations, any fees or penalties 3 25 assessed, court filings, final disposition of any findings, 3 26 and any other information which would assist the department in 3 27 assessing the nature of any violations. 3 28 5. A business that is approved to receive incentives or 3 29 assistance under this section shall, for the length of its 3 30 designation as an enterprise zone business, certify annually 3 31 to the department of economic development its compliance with 3 32 the requirements of this section. 3 33 6. a. For tax years beginning on or after January 1, 3 34 2003, a business that is approved to receive incentives and 3 35 assistance under this section may claim a tax credit up to a 4 1 maximum of five percent of the new investment directly related 4 2 to new jobs created by the location or expansion of an 4 3 eligible business under this section. For purposes of this 4 4 section, "new investment directly related to new jobs created 4 5 by the location or expansion of an eligible business under 4 6 this section" means the cost of machinery and equipment, as 4 7 defined in section 427A.1, subsection 1, paragraphs "e" and 4 8 "j", purchased for use in the operation of the eligible 4 9 business, the purchase price of which has been depreciated in 4 10 accordance with generally accepted accounting principles, and 4 11 the cost of improvements made to real property which is used 4 12 in the operation of the eligible business. 4 13 b. A tax credit under this subsection shall be allowed 4 14 against the tax imposed in chapter 422, divisions II, III, and 4 15 V, and in chapter 432, and against the moneys and credits tax 4 16 imposed in section 533.24. An individual may claim a tax 4 17 credit of a partnership, limited liability company, S 4 18 corporation, estate, or trust electing to have income taxed 4 19 directly to the individual. The amount claimed by the 4 20 individual shall be based upon the pro rata share of the 4 21 individual's earnings from the partnership, limited liability 4 22 company, S corporation, estate, or trust. Any credit in 4 23 excess of the tax liability for the tax year may be credited 4 24 to the tax liability for the following seven years or until 4 25 depleted, whichever occurs earlier. 4 26 c. For purposes of this subsection, the purchase price of 4 27 real property and any buildings and structures located on the 4 28 real property is considered a new investment in the location 4 29 or expansion of an eligible business. However, if within five 4 30 years of purchase, the eligible business sells, disposes of, 4 31 razes, or otherwise renders unusable all or a part of the 4 32 land, buildings, or other existing structures for which a tax 4 33 credit was claimed under this subsection, the tax liability of 4 34 the eligible business for the year in which all or part of the 4 35 property is sold, disposed of, razed, or otherwise rendered 5 1 unusable shall be increased by one of the following amounts: 5 2 (1) One hundred percent of the tax credit claimed under 5 3 this subsection if the property ceases to be eligible for the 5 4 tax credit within one year after being placed in service. 5 5 (2) Eighty percent of the tax credit claimed under this 5 6 subsection if the property ceases to be eligible for the tax 5 7 credit within two years after being placed in service. 5 8 (3) Sixty percent of the tax credit claimed under this 5 9 subsection if the property ceases to be eligible for the tax 5 10 credit within three years after being placed in service. 5 11 (4) Forty percent of the tax credit claimed under this 5 12 subsection if the property ceases to be eligible for the tax 5 13 credit within four years after being placed in service. 5 14 (5) Twenty percent of the tax credit claimed under this 5 15 subsection if the property ceases to be eligible for the tax 5 16 credit within five years after being placed in service. 5 17 Sec. 2. Section 15E.194, Code 2003, is amended by adding 5 18 the following new subsection: 5 19 NEW SUBSECTION. 5. a. As used in this subsection, unless 5 20 the context otherwise requires: 5 21 (1) "Blighted area" means an area of a municipality within 5 22 which the local governing body of the municipality determines 5 23 that the presence of a substantial number of slum, 5 24 deteriorated, or deteriorating structures, insanitary or 5 25 unsafe conditions, diversity of ownership, tax or special 5 26 assessment delinquency exceeding the fair value of the land, 5 27 defective or unusual conditions of title, or the existence of 5 28 conditions which endanger life or property by fire or other 5 29 causes, or any combination of these factors, substantially 5 30 impairs or arrests the sound growth of the municipality, 5 31 retards the provision of housing accommodations, or 5 32 constitutes an economic or social liability and is a menace to 5 33 the public health, safety, or welfare in the area's present 5 34 condition and use. A disaster area referred to in section 5 35 403.5, subsection 7, constitutes a "blighted area". "Blighted 6 1 area" does not include real property assessed as agricultural 6 2 property for purposes of property taxation. 6 3 (2) "High poverty and crime area" means an area of a 6 4 municipality within which the local governing body of the 6 5 municipality determines that the presence of a high poverty 6 6 and unemployment rate, a higher than average number of 6 7 incidences of crime, a higher than average number of drug- 6 8 related incidences of crime, extremely deteriorated physical 6 9 and structural conditions of property, at least fifty percent 6 10 of the structures below local building code requirements, or a 6 11 higher than average number of municipal violations or nuisance 6 12 violations, or any combination of these factors, substantially 6 13 impairs or arrests the sound growth of the municipality, 6 14 retards the provision of housing accommodations, or 6 15 constitutes an economic or social liability, and is a menace 6 16 to the public health, safety, or welfare in the area's present 6 17 condition and use. 6 18 (3) "Slum area" means an area of a municipality within 6 19 which the local governing body of the municipality determines 6 20 that there is a predominance of buildings or improvements, 6 21 whether residential or nonresidential, which by reason of 6 22 dilapidation, deterioration, age, or obsolescence, by reason 6 23 of inadequate provision for ventilation, light, air, 6 24 sanitation, or open spaces, by reason of high density of 6 25 population and overcrowding, by reason of the existence of 6 26 conditions that endanger life or property by fire or other 6 27 causes, or that by any combination of such factors, is 6 28 conducive to ill health, transmission of disease, infant 6 29 mortality, juvenile delinquency, or crime, and which is 6 30 detrimental to the public health, safety, morals, or welfare. 6 31 "Slum area" does not include real property assessed as 6 32 agricultural property for purposes of property taxation. 6 33 b. A city or county may designate all or a portion of a 6 34 certified enterprise zone to be eligible for incentives and 6 35 assistance under section 15E.196, subsection 3, subject to 7 1 certification by the department, when the designated area 7 2 qualifies as a blighted area, a high poverty and crime area, 7 3 or a slum area. A certified enterprise zone shall not contain 7 4 more than one such designated area. 7 5 Sec. 3. Section 15E.195, Code 2003, is amended to read as 7 6 follows: 7 7 15E.195 ENTERPRISE ZONE COMMISSION. 7 8 1. A county which designates an enterprise zone pursuant 7 9 to section 15E.194, subsection 1, and in which an eligible 7 10 enterprise zone is certified shall establish an enterprise 7 11 zone commission to review applications from qualified 7 12 businesses located within or requesting to locate within an 7 13 enterprise zone designated pursuant to section 15E.194, 7 14 subsection 1, to receive incentives or assistance as provided 7 15 in section 15E.196. An enterprise zone commission shall also 7 16 be established, if one does not already exist, for purposes of 7 17 reviewing applications from qualifying businesses under 7 18 section 15E.193D. The enterprise zone commission shall also 7 19 review applications from qualified housing businesses 7 20 requesting to receive incentives or assistance as provided in 7 21 section 15E.193B. The enterprise zone commission shall also 7 22 review applications from qualified development businesses 7 23 requesting to receive incentives or assistance as provided in 7 24 section 15E.193C. The enterprise zone commission shall review 7 25 applications from qualifying businesses requesting to receive 7 26 incentives or assistance as provided in section 15E.193D. The 7 27 commission shall consist of nine members. Five of these 7 28 members shall consist of one representative of the board of 7 29 supervisors, one member with economic development expertise 7 30 chosen by the department of economic development, one 7 31 representative of the county zoning board, one member of the 7 32 local community college board of directors, and one 7 33 representative of the local workforce development center. 7 34 These five members shall select the remaining four members. 7 35 If the enterprise zone consists of an area meeting the 8 1 requirements for eligibility for an urban or rural enterprise 8 2 community under Title XIII of the federal Omnibus Budget 8 3 Reconciliation Act of 1993, one of the remaining four members 8 4 shall be a representative of that community. A county shall 8 5 have only one enterprise zone commissionto review8 6applications for incentives and assistance for businesses8 7located within or requesting to locate within a certified8 8enterprise zone designated pursuant to section 15E.194,8 9subsection 1. 8 10 2. A city with a population of twenty-four thousand or 8 11 more which designates an enterprise zone pursuant to section 8 12 15E.194, subsection 2, and in which an eligible enterprise 8 13 zone is certified shall establish an enterprise zone 8 14 commission to review applications from qualified businesses 8 15 located within or requesting to locate within an enterprise 8 16 zone to receive incentives or assistance as provided in 8 17 section 15E.196. An enterprise zone commission shall also be 8 18 established, if one does not already exist, for purposes of 8 19 reviewing applications from qualifying businesses under 8 20 section 15E.193D. The enterprise zone commission shall review 8 21 applications from qualified housing businesses requesting to 8 22 receive incentives or assistance as provided in section 8 23 15E.193B. The enterprise zone commission shall also review 8 24 applications from qualified development businesses requesting 8 25 to receive incentives or assistance as provided in section 8 26 15E.193C. The enterprise zone commission shall review 8 27 applications from qualifying businesses requesting to receive 8 28 incentives or assistance as provided in section 15E.193D. The 8 29 commission shall consist of nine members. Six of these 8 30 members shall consist of one representative of an 8 31 international labor organization, one member with economic 8 32 development expertise chosen by the department of economic 8 33 development, one representative of the city council, one 8 34 member of the local community college board of directors, one 8 35 member of the city planning and zoning commission, and one 9 1 representative of the local workforce development center. 9 2 These six members shall select the remaining three members. 9 3 If the enterprise zone consists of an area meeting the 9 4 requirements for eligibility for an urban enterprise community 9 5 under Title XIII of the federal Omnibus Budget Reconciliation 9 6 Act of 1993, one of the remaining three members shall be a 9 7 representative of that community. If a city contiguous to the 9 8 city designating the enterprise zone is included in an 9 9 enterprise zone, a representative of the contiguous city, 9 10 chosen by the city council, shall be a member of the 9 11 commission. A city in which an eligible enterprise zone is 9 12 certified shall have only one enterprise zone commission. If 9 13 a city has established an enterprise zone commission prior to 9 14 July 1, 1998, the city may petition to the department of 9 15 economic development to change the structure of the existing 9 16 commission. 9 17 3. The commission may adopt more stringent requirements, 9 18 including requirements related to compensation and benefits, 9 19 for a business to be eligible for incentives or assistance 9 20 than provided in sections 15E.193, 15E.193B,and15E.193C, and 9 21 15E.193D. The commission may develop as an additional 9 22 requirement that preference in hiring be given to individuals 9 23 who live within the enterprise zone. The commission shall 9 24 work with the local workforce development center to determine 9 25 the labor availability in the area. The commission shall 9 26 examine and evaluate building codes and zoning in the 9 27 enterprise zone and make recommendations to the appropriate 9 28 governing body in an effort to promote more affordable housing 9 29 development. 9 30 4. If the enterprise zone commission determines that a 9 31 business qualifies and is eligible to receive incentives or 9 32 assistance as provided in section 15E.193B, 15E.193C, 9 33 15E.193D, or 15E.196, the commission shall submit an 9 34 application for incentives or assistance to the department of 9 35 economic development. The department may approve, defer, or 10 1 deny the application. 10 2 5. In making its decision, the commission or department 10 3 shall consider the impact of the eligible business on other 10 4 businesses in competition with it and compare the compensation 10 5 package of businesses in competition with the business being 10 6 considered for incentives or assistance. The commission or 10 7 department shall make a good faith effort to identify existing 10 8 Iowa businesses within an industry in competition with the 10 9 business being considered for incentives or assistance. The 10 10 commission or department shall also make a good faith effort 10 11 to determine the probability that the proposed incentives or 10 12 assistance will displace employees of existing businesses. In 10 13 determining the impact on businesses in competition with the 10 14 business seeking incentives or assistance, jobs created as a 10 15 result of other jobs being displaced elsewhere in the state 10 16 shall not be considered direct jobs created. 10 17 However, if the commission or department finds that an 10 18 eligible business has a record of violations of the law, 10 19 including but not limited to environmental and worker safety 10 20 statutes, rules, and regulations, over a period of time that 10 21 tends to show a consistent pattern, the eligible business 10 22 shall not qualify for incentives or assistance under section 10 23 15E.193B, 15E.193C, 15E.193D, or 15E.196, unless the 10 24 commission or department finds that the violations did not 10 25 seriously affect public health or safety or the environment, 10 26 or if it did that there were mitigating circumstances. In 10 27 making the findings and determinations regarding violations, 10 28 mitigating circumstances, and whether an eligible business is 10 29 eligible for incentives or assistance under section 15E.193B, 10 30 15E.193C, 15E.193D, or 15E.196, the commission or department 10 31 shall be exempt from chapter 17A. If requested by the 10 32 commission or department, the business shall provide copies of 10 33 materials documenting the type of violation, any fees or 10 34 penalties assessed, court filings, final disposition of any 10 35 findings, and any other information which would assist the 11 1 commission or department in assessing the nature of any 11 2 violation. 11 3 6. A business that is approved to receive incentives or 11 4 assistance shall, for the length of its designation as an 11 5 enterprise zone business, certify annually to the county or 11 6 city, as applicable, and the department of economic 11 7 development its compliance with the requirements of section 11 8 15E.193, 15E.193B,or15E.193C, or 15E.193D. 11 9 Sec. 4. Section 15E.196, Code 2003, is amended to read as 11 10 follows: 11 11 15E.196 INCENTIVES – ASSISTANCE. 11 12 1. For purposes of determining the incentives or 11 13 assistance provided in this section, "eligible business" means 11 14 a business which has been approved to receive incentives and 11 15 assistance by the department of economic development pursuant 11 16 to application as provided in section 15E.195. 11 17 2. The incentives and assistance provided under this 11 18divisionsubsection for businesses located in enterprise zones 11 19 shall be for a period not to exceed ten years and shall 11 20 include all of the following: 11 211.a. (1) New jobs credit from withholding, as provided 11 22 in section 15.331. 11 23b. (1)(2) (a) As an alternative toparagraph "a"11 24 subparagraph (1), a business may provide a housing assistance 11 25 program in the form of down payment assistance or rental 11 26 assistance for employees in new jobs, as defined in section 11 27 260E.2, who buy or rent housing located within any certified 11 28 enterprise zone. A business establishing a housing assistance 11 29 program shall fund this program through a credit from 11 30 withholding based on the wages paid to the employees 11 31 participating in the housing assistance program. An amount 11 32 equal to one and one-half percent of the gross wages paid by 11 33 the employer to each employee participating in the housing 11 34 assistance program shall be credited from the payment made by 11 35 an employer pursuant to section 422.16. If the amount of the 12 1 withholding by the employer is less than one and one-half 12 2 percent of the gross wages paid to the employees, then the 12 3 employer shall receive a credit against other withholding 12 4 taxes due by the employer. The employer shall deposit the 12 5 amount of the credit quarterly into a housing assistance fund 12 6 created by the business out of which the business shall 12 7 provide employees enrolled in the housing assistance program 12 8 with down payment assistance or rental assistance. 12 9(2)(b) A business may enter into an agreement with the 12 10 county or city designating the enterprise zone pursuant to 12 11 section 15E.194 to borrow initial moneys to fund a housing 12 12 assistance program. The county or city may appropriate from 12 13 the general fund of the county or city for the assistance 12 14 program an amount not to exceed an amount estimated by the 12 15 department of revenue and finance to be equal to the total 12 16 amount of credit from withholding for employees determined by 12 17 the business to be enrolled in the program during the first 12 18 two years. The business shall pay the principal and interest 12 19 on the loan out of moneys received from the credit from 12 20 withholding provided for in subparagraph(1)subdivision (a). 12 21 The terms of the loan agreement shall include the principal 12 22 amount, the interest rate, the terms of repayment, and the 12 23 term of the loan. The terms of the loan agreement shall not 12 24 extend beyond the period during which the enterprise zone is 12 25 certified. 12 26(3)(c) The employer shall certify to the department of 12 27 revenue and finance that the credit from withholding is in 12 28 accordance with an agreement and shall provide other 12 29 information the department may require. 12 30(4)(d) An employee participating in the housing 12 31 assistance program will receive full credit for the amount 12 32 withheld as provided in section 422.16. 12 332.b. Sales, services, and use tax refund, as provided in 12 34 section 15.331A. 12 353.c. Investment tax credit, as provided in section 13 1 15.333. 13 24.d. Research activities credit, as provided in section 13 3 15.335. 13 45.e. The county or city for which an eligible enterprise 13 5 zone is certified may exempt from all property taxation all or 13 6 a portion of the value added to the property upon which an 13 7 eligible business locates or expands in an enterprise zone and 13 8 which is used in the operation of the eligible business. The 13 9 amount of value added for purposes of thissubsection13 10 paragraph shall be the amount of the increase in assessed 13 11 valuation of the property following the location or expansion 13 12 of the business in the enterprise zone. If an exemption 13 13 provided pursuant to thissubsectionparagraph is made 13 14 applicable to only a portion of the property within an 13 15 enterprise zone, the definition of that subset of eligible 13 16 property must be by uniform criteria which further some 13 17 planning objective established by the city or county 13 18 enterprise zone commission and approved by the eligible city 13 19 or county. The exemption may be allowed for a period not to 13 20 exceed ten years beginning the year the eligible business 13 21 enters into an agreement with the county or city to locate or 13 22 expand operations in an enterprise zone. 13 236.f. Insurance premium tax credit, as provided in section 13 24 15.333A. 13 257.g. A business eligible to receive incentives and 13 26 assistance described in thissectionsubsection and located in 13 27 a building for which incentives and assistance are or have 13 28 been claimed by an approved development business under section 13 29 15E.193C is not eligible to receive the following incentives 13 30 and assistance: 13 31a.(1) An investment tax credit undersubsection 313 32 paragraph "c" for the portion of the investment tax credit 13 33 that is claimed on the purchase price of land or improvements 13 34 to real property by an approved development business pursuant 13 35 to section 15E.193C, subsection 7, paragraph "a". 14 1b.(2) Sales, services, and use tax refund under 14 2subsection 2paragraph "b" that is made pursuant to section 14 3 15E.193C, subsection 7, paragraph "b". 14 4c.(3) A property tax exemption undersubsection 514 5 paragraph "e" for improvements to real property that are 14 6 exempted from property taxation pursuant to section 15E.193C, 14 7 subsection 7, paragraph "c". 14 8 3. The incentives and assistance provided under this 14 9 subsection for businesses and taxpayers located in designated 14 10 areas of enterprise zones designated pursuant to section 14 11 15E.194, subsection 5, shall be for a period not to exceed ten 14 12 years and shall include all of the following: 14 13 a. A taxpayer with a business located in the designated 14 14 area of an enterprise zone shall be exempt from corporate 14 15 income tax under chapter 422, division III, on the portion of 14 16 net income reasonably attributable to the trade or business or 14 17 sources within the designated area of the enterprise zone. 14 18 The method of attributing net income received from within the 14 19 enterprise zone and net income received from outside the 14 20 enterprise zone shall be calculated in a manner similar to 14 21 that used in section 422.33, subsection 2. 14 22 A taxpayer with an office of a financial institution 14 23 located in the designated area of an enterprise zone shall 14 24 also be exempt from the franchise tax in chapter 422, division 14 25 V, on the portion of the net income received through the 14 26 business activity in offices located in the designated area of 14 27 the enterprise zone as determined by rules adopted by the 14 28 department of revenue and finance pursuant to section 422.65 14 29 regarding allocation of the franchise tax. 14 30 b. A business owning property within the designated area 14 31 of an enterprise zone shall be exempt from paying local 14 32 property taxes on the property located solely in the 14 33 designated area of the enterprise zone as provided in section 14 34 427.1, subsection 34. This incentive shall not be available 14 35 to owners of residential rental property located in the 15 1 designated area of an enterprise zone in tax years in which 15 2 the property is not in substantial compliance with all 15 3 applicable state and local zoning, building, housing, and 15 4 health laws, ordinances, or codes. 15 5 c. A business located in the designated area of an 15 6 enterprise zone shall be eligible to receive the new jobs 15 7 credit from withholding, as provided in section 15.331, and 15 8 the sales, services, and use tax refund, as provided in 15 9 section 15.331A. 15 10 4. During the last three years that a taxpayer is eligible 15 11 for an exemption, refund, or credit described in subsection 3, 15 12 the exemption, refund, or credit shall be reduced by the 15 13 following percentages: 15 14 a. For the tax year that is two years before the final 15 15 year of designation as an enterprise zone, the reduction shall 15 16 be twenty-five percent. 15 17 b. For the tax year immediately preceding the final year 15 18 of designation as an enterprise zone, the reduction shall be 15 19 fifty percent. 15 20 c. For the tax year that is the final year of designation 15 21 as an enterprise zone, the reduction shall be seventy-five 15 22 percent. 15 23 5. The following exceptions shall apply to the incentives 15 24 and assistance allowed under subsection 3: 15 25 a. A taxpayer shall not be eligible during any tax year in 15 26 which the taxpayer is delinquent in paying any federal, state, 15 27 or local taxes. 15 28 b. A taxpayer shall not be eligible during any tax year in 15 29 which the taxpayer owns residential rental property within the 15 30 enterprise zone that is not in substantial compliance with all 15 31 applicable state and local zoning, building, and housing laws, 15 32 ordinances, or codes. 15 33 c. A business located outside a designated area of an 15 34 enterprise zone designated pursuant to section 15E.194, 15 35 subsection 5, that relocates into such an area of an 16 1 enterprise zone shall not receive the incentives and 16 2 assistance granted under subsection 3 of this section unless 16 3 the governing body of the political subdivision in which the 16 4 business is located approves the relocation of the business. 16 5 d. If a business relocates more than twenty-five full-time 16 6 equivalent jobs from one or more locations outside a 16 7 designated area of an enterprise zone designated pursuant to 16 8 section 15E.194, subsection 5, to a location within such a 16 9 designated area of an enterprise zone, the business shall 16 10 notify the department of economic development and the 16 11 political subdivision from which the jobs are being relocated 16 12 of the relocation. The business is not eligible for 16 13 incentives and assistance granted under subsection 3 of this 16 14 section if the political subdivision from which the jobs are 16 15 being relocated adopts a resolution objecting to the 16 16 relocation of the jobs within sixty days after the 16 17 notification by the business. The business becomes eligible 16 18 sixty days after the notification if such a resolution is not 16 19 adopted or if an objection is rescinded by a subsequent 16 20 resolution. A political subdivision that objects to the 16 21 relocation of jobs shall file a copy of all resolutions of 16 22 objections and recision with the department of revenue and 16 23 finance, the department of economic development, and the 16 24 political subdivision where the enterprise zone is located. 16 25 6. a. Incentives and assistance received from the state 16 26 under subsection 3, paragraphs "a" and "c", shall be limited 16 27 to two million dollars per enterprise zone, unless an 16 28 enterprise zone commission lowers the incentives and 16 29 assistance limit in paragraph "b" of this subsection. If a 16 30 commission lowers the incentives and assistance limit under 16 31 paragraph "b" of this subsection, the limit under this 16 32 paragraph shall equal the limit set by the commission. 16 33 b. Incentives and assistance received from the local 16 34 property tax exemption in subsection 3, paragraph "b", shall 16 35 be limited to two million dollars per enterprise zone, unless 17 1 an enterprise zone commission sets a limit of less than two 17 2 million dollars. 17 3 Sec. 5. NEW SECTION. 422.11H ENTERPRISE ZONE TAX CREDIT. 17 4 The tax imposed under this division, less the credits 17 5 allowed under sections 422.12 and 422.12B, shall be reduced by 17 6 an enterprise zone tax credit authorized pursuant to section 17 7 15E.193D, subsection 6. 17 8 Sec. 6. Section 422.33, Code 2003, is amended by adding 17 9 the following new subsection: 17 10 NEW SUBSECTION. 14. The taxes imposed under this division 17 11 shall be reduced by an enterprise zone tax credit authorized 17 12 pursuant to section 15E.193D, subsection 6. 17 13 Sec. 7. Section 422.60, Code 2003, is amended by adding 17 14 the following new subsection: 17 15 NEW SUBSECTION. 7. The taxes imposed under this division 17 16 shall be reduced by an enterprise zone tax credit authorized 17 17 pursuant to section 15E.193D, subsection 6. 17 18 Sec. 8. Section 427.1, Code 2003, is amended by adding the 17 19 following new subsection: 17 20 NEW SUBSECTION. 34. ENTERPRISE ZONES. The property 17 21 located solely in a designated area of an enterprise zone 17 22 designated pursuant to section 15E.194, subsection 5, for the 17 23 duration of the enterprise zone designation. 17 24 Sec. 9. NEW SECTION. 432.12D ENTERPRISE ZONE TAX 17 25 CREDITS. 17 26 The tax imposed under this chapter shall be reduced by an 17 27 enterprise zone tax credit authorized pursuant to section 17 28 15E.193D, subsection 6. 17 29 Sec. 10. Section 533.24, Code 2003, is amended by adding 17 30 the following new unnumbered paragraph after unnumbered 17 31 paragraph 4: 17 32 NEW UNNUMBERED PARAGRAPH. The moneys and credits tax 17 33 imposed under this section shall be reduced by an enterprise 17 34 zone tax credit authorized pursuant to section 15E.193D, 17 35 subsection 6. 18 1 EXPLANATION 18 2 This bill relates to the enterprise zone program 18 3 administered by the department of economic development. 18 4 The bill allows businesses that are not located in an 18 5 enterprise zone to claim a tax credit up to a maximum of 5 18 6 percent of the new investment directly related to new jobs 18 7 created by the location or expansion of an eligible business 18 8 under the program. The tax credit shall be allowed against 18 9 personal and corporate income tax, the franchise tax for 18 10 financial institutions, the insurance premium tax, and the 18 11 moneys and credits tax for credit unions. The bill provides 18 12 that the tax credit may be carried forward for seven years. 18 13 The bill provides criteria relating to the type of 18 14 business, employee wages and benefits, employment, and capital 18 15 investment that a business not located in an enterprise zone 18 16 must meet in order to receive assistance under the program. 18 17 For a business located in a city or county meeting the 18 18 distress criteria of the program, the bill requires the 18 19 business to apply for assistance and incentives under the 18 20 program through the enterprise zone for the city or county. 18 21 For a business not located in a city or county meeting the 18 22 distress criteria of the program, the bill requires the city 18 23 or county where the business is located, after approval of a 18 24 project by ordinance or resolution, to submit an application 18 25 for incentives and assistance to the department. The bill 18 26 includes continued compliance and reporting provisions for a 18 27 business receiving incentives and assistance. The bill 18 28 requires the department, in considering applications, to 18 29 consider the impact of the eligible business on other 18 30 businesses in competition with it and compare the compensation 18 31 package of businesses in competition with the business being 18 32 considered for incentives or assistance. 18 33 The bill allows a city or county to designate all or a 18 34 portion of a certified enterprise zone to be eligible for 18 35 incentives and assistance other than the regular incentives 19 1 and assistance available under the enterprise zone program. 19 2 The designated area must qualify as a blighted area, a high 19 3 poverty and crime area, or a slum area, as defined in the 19 4 bill. The bill provides that a certified enterprise zone 19 5 shall not contain more than one such designated area. 19 6 The bill provides that incentives and assistance for 19 7 designated areas of enterprise zones include all of the 19 8 following: 19 9 1. Corporate income tax and franchise tax exemptions for 19 10 any taxpayer with a business located in the designated area of 19 11 the enterprise zone on the portion of the net income 19 12 reasonably attributable to the trade or business or sources 19 13 within the designated area of the enterprise zone. 19 14 2. A property tax exemption for a business owning property 19 15 within the designated area of the enterprise zone for property 19 16 located solely within the designated area of the enterprise 19 17 zone. 19 18 3. The new jobs credit from withholding and the sales, 19 19 services, and use tax refund for businesses located in the 19 20 designated area of the enterprise zone. 19 21 The bill provides that the incentives and assistance for 19 22 designated areas of the enterprise zones shall be reduced by 19 23 25 percent during the tax year two years before the final year 19 24 of the enterprise zone designation, by 50 percent during the 19 25 tax year immediately preceding the final year of the 19 26 enterprise zone designation, and by 75 percent during the 19 27 final year of the enterprise zone designation. 19 28 The bill provides a number of exceptions for incentives and 19 29 assistance for designated areas of enterprise zones. The 19 30 exceptions include the following: 19 31 1. A taxpayer shall not be eligible during any tax years 19 32 in which the taxpayer is delinquent in paying any federal, 19 33 state, or local taxes. 19 34 2. A taxpayer shall not be eligible during any tax years 19 35 in which the taxpayer owns residential rental property located 20 1 within a designated area of the enterprise zone that is not in 20 2 substantial compliance with all applicable state and local 20 3 zoning, building, and housing laws, ordinances, or codes. 20 4 3. A business located outside a designated area of an 20 5 enterprise zone that relocates into a designated area of an 20 6 enterprise zone shall not receive the incentives and 20 7 assistance unless the governing body of the political 20 8 subdivision in which the business is located approves the 20 9 relocation of the business. 20 10 4. If a business relocates more than 25 full-time 20 11 equivalent jobs from one or more locations outside a 20 12 designated area of an enterprise zone to a location within a 20 13 designated area of an enterprise zone, the business shall 20 14 notify the department of economic development and the 20 15 political subdivision from which the jobs are being relocated 20 16 of the relocation. The bill allows the political subdivision 20 17 to block the availability of designated area enterprise zone 20 18 incentives and assistance by objecting to the relocation of 20 19 jobs through a resolution. 20 20 The bill provides that incentives and assistance received 20 21 from the state through the corporate income tax and franchise 20 22 tax exemptions and the new jobs credit from withholding for 20 23 designated areas of enterprise zones shall be limited to $2 20 24 million per enterprise zone. The bill provides that 20 25 incentives and assistance received from the local property tax 20 26 exemption for designated areas of enterprise zones shall be 20 27 limited to $2 million per enterprise zone, unless the 20 28 enterprise zone commission sets a limit of less than $2 20 29 million. If the enterprise zone commission lowers the 20 30 incentives and assistance limit, the limit for incentives and 20 31 assistance from the state shall equal the limit set by the 20 32 commission. 20 33 LSB 2486HC 80 20 34 tm/pj/5
Text: HSB00188 Text: HSB00190 Text: HSB00100 - HSB00199 Text: HSB Index Bills and Amendments: General Index Bill History: General Index
© 2003 Cornell College and League of Women Voters of Iowa
Comments about this site or page?
webmaster@legis.iowa.gov.
Please remember that the person listed above does not vote on bills. Direct all comments concerning legislation to State Legislators.
Last update: Wed Feb 26 02:30:23 CST 2003
URL: /DOCS/GA/80GA/Legislation/HSB/00100/HSB00189/030225.html
jhf